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SSE to bow out of 50/50 joint ventures with Wheelabrator

Aerial view of the Ferrybridge Multifuel II power plant
The Ferrybridge Multifuel II RDF power plant
went into commercial operation in 2019.
14.10.2020 − 

The Scottish energy utility SSE plc is withdrawing from the waste incineration sector. The company will sell its 50 per cent stakes in both Ferrybridge multifuel power plants as well as its half of the planned Skelton Grange multifuel plant to an infrastructure fund managed by First Sentier Investors. According to its own account, SSE is to receive a total cash consideration of £995m for the energy from waste assets, all of which are located in Yorkshire in Northern England. At current exchange rates, that puts the value of the transaction at approximately €1.09bn. The utility expects the sale, which is still subject to approval by the EU competition directorate, to close in "late 2020".

SSE is divesting its interests in the entities Multifuel Energy Limited (MEL1), which owns the two Ferrybridge refuse-derived fuel (RDF) power plants, and Multifuel Energy 2 Limited (MEL2), the project company for the planned Skelton Grange facility. SSE's 50/50 joint venture partner in both companies has been the US waste to energy specialist Wheelabrator Technologies.

Gregor Alexander, SSE's finance director, said that, "While these multifuel assets have been successful ventures for SSE, they are non-core investments and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses."

The Ferrybridge Multifuel I (FM1) plant with an annual treatment capacity of up to 725,000 tonnes went into operation in 2015. The neighbouring FM2 facility, which can process up to 675,000 tonnes of waste per year, went online in 2019. Each has a capacity of 75 MW.

For the Skelton Grange project, SSE expects the financing negotiations to be completed in April 2021. The 45 MW plant is expected to treat around 400,000 tonnes of waste per year and to enter commercial operation in 2025.

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